BofA Merrill says an oil production freeze could push oil above $50

Bank of America Merrill Lynch said on Wednesday that global oil market rebalancing was under way and that prices could soon jump above $50 a barrel if a deal to freeze production results from a meeting in Doha this weeken

With Russian oil supply declines in view, a freeze would tighten global balances by about 500,000 barrels per day in the second half of the year, the bank said in a note.

Oil prices were seen trading lower on Wednesday on concerns over rising U.S. crude inventories and skepticism around a Doha output freeze deal. U.S. crude was down 0.8 percent at $41.83 , while Brent crude fell 0.9 percent to $44.28.

BofA, which presented several other scenarios, said that if Saudi Arabia reports further output expansion in response to Iran's return, Brent prices could retreat to the $30-to-$35-per-barrel range.

If no firm agreement is reached in Doha, Brent prices could potentially be pulled back below $40 in the very near-term, according to the bank.

BofA, which maintains its projection that oil would trade above $50 a barrel next year on average, said it did not see prices plunging into mid-to-low $30s.